The best month for the USD as the king of the currency continues to show significant strengthening after being led by encouraging US retail sales data.
The surge in high inflation still remains a supporting factor to the strengthening of the USD and now it also gets additional support from the rebound in US 10 -year treasury yields.
Meanwhile, the Euro continued to be embroiled in dovish statements by the European central bank (ECB) which set at an unchanged policy rate that was considered the root cause of the Euro's weakness.
Looking at the price chart of the EUR/USD pair, the price continued to plunge close to 400 pips to remain bearish from the 1.17000 high reached at the end of October.
The downtrend is also seen to have tested the support zone of 1.13000 and indirectly once again has set the latest record to reach the lowest level of 2021 at around 1.13100.
Strengthen investors ’expectations when seeing price movements still trading below the Moving Average 50 (MA50) barrier level on the 1 -hour time frame to signal a bearish trend.
Analysts are of the opinion that if the price decline persists, the latest support zone at 1.12000 probability will be tested and will be studied to assess the direction of the next movement.
It also shows that the support zone was also a resistance in the past before it was successfully overcome to become the RBS zone (resistance become support) in supporting the price spike.
On the other hand, if the price movement returns to signal to change the trend to a bullish trend, the SBR zone (support become resistance) 1.14000 is likely to be reached again.
Meanwhile, a stronger increase will remain in the SBR zone which is further at 1.15000 and continues to pass the MA50 resistance level for a clear upside shadow.
